The Reality of Prescription Drug Spending in Medicaid

PhRMA September 3, 2015

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Recent rhetoric on spending in state Medicaid programs often overstates the cost impact of prescription medicines and ignores the competitive biopharmaceutical market that exists in the U.S., which can generate significant savings for Medicaid programs. Prescription medicines account for just 4-5 percent of total Medicaid spending and this share is projected to remain stable through the next decade, even as important advances, such as those made against hepatitis C continue. That’s because competition among brand-name medicines and aggressive tactics by insurers to negotiate prices all help to keep costs under control.

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